Preliminary Results FY 2018 28 June 2018
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Contents Welcome and introduction 4 5 Overview and highlights Financials 7 Punter Southall acquisition 11 Opportunities across our business 14 Integration 23 25 New business Summary 27
Welcome and introductions Ben Bramhall Paul Cuff Mike Ainslie Co-Chief Executive Co-Chief Executive Chief Financial Officer Officer Officer 4
Overview & Highlights 5
Highlights: becoming largest purely pensions firm in UK Successful first year as a Transformational acquisition of public limited company Punter Southall businesses Strong financial performance throughout Increased strength and capabilities the year • Positive market reaction • Underlying ‘Xafinity’ business grew 4.4%, strong second half of year (6.5%) • Improves deliverability of wider plans Successful new initiatives including Radar Strong start to integration and TVAS • Enthusiastic staff response • Immediate new business success • Strong pipeline of new opportunities 6
Financials 7
Financial performance Reported Exceptional Adjusted Including Reported Exceptional Adjusted £'millions 2018 2018 2018 HRT 2018 2017 2017 2017 Revenue 64.0 64.0 66.0 52.0 52.0 Wages & salaries -31.8 -31.8 -32.9 -24.9 -24.9 Property & general business costs -13.1 -13.1 -13.2 -9.6 -9.6 Share based payment costs IFRS2 -1.2 -1.2 0.0 0.0 Share based payment costs EBT -2.4 -2.4 -14.3 -14.3 Exceptional expenses acquisition/ IPO -3.7 -3.7 -1.9 -1.9 Exceptional expenses other -0.7 -0.7 -1.0 -1.0 Other income 0.5 0.5 EBITDA 11.6 19.1 19.9 0.2 17.5 Depreciation of tangible assets & software -1.1 -1.1 -1.1 -1.0 -1.0 Amortisation of acquistion intangibles -4.8 -4.8 -3.7 -3.7 Profit from Operating activities 5.7 18 18.8 -4.5 16.5 Net finance costs -1.5 -0.4 -1.1 -1.0 -8.7 -2.9 -5.8 Profit Before Tax 4.2 16.9 17.8 -13.2 10.7 Tax -1.2 -3.2 -3.3 0.4 2.8 -2.4 Profit After Tax (excluding profit on sale of HR 3.0 13.7 14.4 -12.8 8.3 Trustees business) EPS Basis (pence) 2.0p 9.2p 9.6p -12.5p 8.1p EPS Diluted (pence) 1.9p 8.9p 9.3p -12.5p 8.0p 8
Income statement Underlying Revenue Growth • H1 : 1.8%. H2 : 6.5% • Full ‐ year: 4.4% Financial Highlights Revenue Revenue PBT PBT PAT PAT £'m 2018 2017 2018 2017 2018 2017 Adjusted EPS (Diluted) Xafinity continuing business 51.51 49.35 0.80 (14.09) 0.22 (13.53) • 2017 : 8.0p • 2018 : 9.3p (16% growth) Other One Off Adjustments 0.38 0.14 - - - - PS acquired 11.1.18 12.84 - 3.42 - 2.77 - Dividend Total per 2018 Financial Statements 63.97 49.49 4.22 (14.09) 2.99 (13.53) • Proposed dividend (final) of HRT sold 11.1.18 2.07 2.55 0.83 0.92 0.68 0.74 4.2p per share (£8.5m). Interim dividend of 2.1p HRT profit on sale 8.16 gives 6.3p for the full year. • Dividend policy remains to Total including discontinued operations 66.04 52.04 5.05 (13.17) 11.83 (12.79) pay out up to two ‐ thirds of Adjusted profit after tax (i.e. after adding back Margin 2014 2015 2016 2017 2018 Acquisition Amortisation and share related charges). Revenue (£m) 46.9 50.0 51.8 52.0 64.0 One ‐ third as interim, two ‐ thirds as final. 2018 Costs (£m) 32.4 34.4 35.1 34.5 44.9 calculation based on interim dividend as full year Adj. EBITDA (£m) 14.5 15.6 16.7 17.5 19.1 distorted by exceptional Margin (£m) 31% 31% 32% 34% 30% items arising from acquisition and sale. 9
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